Aug 11, 201401:51 PMOpen Mic
Send us your blog for consideration!
10 things you should know about Wisconsin’s new trust code
(page 1 of 2)
On Dec. 13, Gov. Scott Walker signed the New Wisconsin Trust Code (WTC) into law. With an effective date of July 1, 2014, the WTC fundamentally changes the law that governs Wisconsin trusts — both trusts that existed before July 1 and that have been created afterward.
With its adoption of the WTC, Wisconsin became the 27th state to enact its version of the Uniform Trust Code. The Uniform Trust Code is a model law designed to modernize the legislation governing trusts across the country. This new, robust law makes Wisconsin a much more desirable place to administer trusts and provides fantastic planning opportunities for Wisconsin business owners and residents.
The WTC is a default statute, which means that (in most cases) if you do not like what the WTC provides, you can override it in your trust. However, if you do not override the WTC in your trust document, the law’s default rules will apply.
As you consider the new WTC and its implications for your business or trust, here are 10 things to keep in mind:
1. The WTC applies to existing trusts. The changes created under the WTC apply to most trusts in Wisconsin and do not negate the effectiveness of existing trusts. Existing trusts remain valid but are subject to the new rules with only limited and minor exceptions.
2. New rules codify prior law. The new laws codify (clarify and confirm) many of the unofficial rules that we have been working with in Wisconsin for years. Some parts of the WTC are brand new in Wisconsin, but most of the WTC is consistent with existing law.
3. Wisconsin “tweaked” the uniform law for our own circumstances. The Uniform Trust Code served as the basis of much of the WTC. The Uniform Trust Code was developed so that it could be implemented across the country, but each state has tailored it to meet its own situation. A working committee spent eight years studying and debating the Uniform Trust Code and its implementation across the country before the Legislature passed the WTC in December 2013.
4. Nonjudicial settlement agreements and representation create flexibility. Trustees and beneficiaries of trusts now have more flexibility in dealing with changed circumstances. Prior to the enactment of the WTC, families and trustees often had to go to court to resolve differences regarding a trust. Now under the WTC, families and trustees can stay out of court by using a “nonjudicial settlement agreement” coupled with representation of various parties to address changes that have arisen since the trust was formed.
5. Trustees have specifically listed duties. Trustees now have a number of specifically identified duties and responsibilities to the trust beneficiaries. The flip side to the specifically enumerated list of trustee duties is that beneficiaries now have a laundry list of specific rights that trustees have to satisfy. The beneficiaries also have a specified list of information that trustees must provide about the trust and its operations.